Does Life Insurance Cover Funeral Costs in New Zealand?
Most New Zealand life insurance policies already cover funeral costs, releasing $15,000 to $25,000 of the sum insured before the full claim is assessed and at no extra premium. Four insurer wordings give it four different names: a Funeral Benefit at AIA, a Bereavement benefit at Fidelity Life, a Funeral advancement at Asteron Life, and a Bereavement Support Benefit at Chubb Life.
In short
- AIA pays its Funeral Benefit immediately on written notification of death and states that doing so does not indicate acceptance of the claim, while Asteron Life pays its Funeral advancement only once the claim is accepted (AIA policy wording PC-LC-10/2023, retrieved 18 August 2026).
- AIA pays $15,000 where the life assured is the sole policy owner and $25,000 where a policy owner survives them, so how the policy is owned moves the amount by $10,000.
- Searching a policy document for the word funeral finds nothing on two of those four wordings, so search for bereavement, advance, advancement and accelerated as well.
Yes. Most New Zealand life insurance policies already release money for the funeral before the full claim is assessed, at no extra premium. The catch is that no two insurers call it the same thing. AIA writes it as a Funeral Benefit, Fidelity Life as a Bereavement benefit, Asteron Life as a Funeral advancement, Chubb Life as a Bereavement Support Benefit. If you search your policy document for "funeral" you may find nothing at all.
This page is about the benefit already sitting inside a policy you may hold: what four insurers' own wordings say it pays, what triggers payment, and the one ownership detail that changes the amount by $10,000. If you are shopping for a standalone product instead, our funeral insurance comparison covers the whole market and who underwrites each brand.
How the Funeral Advance Benefit Works
A funeral advance is a standard feature built into most New Zealand life insurance policies. On the four wordings verified below it releases $15,000 to $25,000, and on most of them it is triggered by written notification of death rather than by acceptance of the claim.
The advance is an early release of part of your sum insured, not extra money. If you hold $500,000 of life cover and a $25,000 advance is paid, the remaining $475,000 follows once the full claim is settled. What makes it valuable is the sequencing rather than the raw speed.
- Death occurs. Your family or the executor of your estate notifies the insurer.
- Partial payment ahead of the claim decision. The insurer releases the advance once it has the death notification and basic documentation, usually just a death certificate. On AIA's wording this happens before the claim itself has been accepted.
- The funeral is paid for. Your family uses the advance to settle the funeral director's account and other urgent costs.
- The full claim is processed. The remainder of the sum insured follows through the standard claims process.
That sequence solves a real timing problem. Funeral directors typically require payment within 30 days, while estate funds are frozen until probate is granted. The advance bridges that gap because it is released on notification rather than on assessment, so your family is not waiting on an underwriting decision to pay the funeral director. It is also why AIA's wording is careful to say that paying it does not mean the claim has been accepted: the insurer is deliberately releasing money before it has finished assessing.
What Each NZ Insurer Calls the Funeral Benefit, and What It Pays
The funeral benefit is standard on retail life cover in New Zealand and costs nothing extra, but the name, the amount and the trigger all differ by insurer. The table below quotes only wordings and product documents we have read, on the dates shown. Where we could not verify a figure we have left it out rather than estimate it.
| Insurer | What the wording calls it | What it pays | What triggers payment |
|---|---|---|---|
| AIA | Funeral Benefit | The lower of the Life Cover Benefit, $15,000 if the life assured is the sole policy owner, or $25,000 if there is a surviving policy owner | Paid "immediately" on written notification acceptable to AIA that the life assured has died. The wording states that paying it "does not indicate Our acceptance of the claim" |
| Fidelity Life | Bereavement benefit | An immediate advance payment of $25,000, or the Life cover sum insured if that is lower | You apply for it after the insured person dies |
| Asteron Life | Funeral advancement benefit | An advance payment of $15,000 or $25,000 from your Life Cover | Paid when the life insurance claim is accepted, a later trigger than the other two |
| Chubb Life | Bereavement Support Benefit | Up to $25,000 paid early towards funeral expenses | An accelerated payment of the Life Cover sum insured |
Sources: AIA, *Personal Cover, Life Cover* policy wording, PC-LC-10/2023; Fidelity Life, *Platinum Plus Life cover wordings*; Asteron Life, *Life Insurance* and its life cover brochure, all retrieved 18 August 2026; Chubb Life NZ Assurance Extra Life Cover, captured 14 August 2026. Every one of these is an early release of your own sum insured, not extra money.
What was not verified for this update
We could not verify a funeral or bereavement advance figure for Partners Life or nib NZ against those insurers' own published documents while preparing this update, so no figure for either appears above. That absence is not evidence the benefit does not exist. It means we have not read the wording, and we would rather say so than publish a number. Ask your adviser to check your own policy schedule, or ask the insurer directly.
The detail that moves the amount by $10,000
Two of the four wordings above pay a different amount depending on whether there is a surviving policy owner. AIA pays $15,000 where the life assured is the sole policy owner and $25,000 where someone else on the policy survives them. Asteron Life's brochure states the same two figures. That is a structural point about how the policy is owned, not about how much cover you bought, and it is decided years before anyone claims.
The reason is administrative rather than mean-spirited. Where the deceased was the sole owner, the money is technically payable to their estate, which the insurer cannot release as freely. Where a partner is a joint or surviving owner, there is someone alive with the legal standing to receive it. If you are married or in a de facto relationship and hold cover as sole owner, ask your adviser whether restructuring the ownership is appropriate for you. It may be, and it may not be, because ownership affects far more than this one benefit.
How to Find the Advance in Your Own Policy Document
Searching your policy document for the word "funeral" is the most common reason people conclude they do not have this benefit when in fact they do. Only two of the four wordings verified above use that word in the benefit's name. Search instead for bereavement, advance, advancement, early payment and accelerated, and read the built-in benefits section rather than the optional extras.
Then check three things, in this order.
Whether the trigger is notification or acceptance. This is the difference between money arriving in the week of the funeral and money arriving after the claim has been assessed. AIA's wording pays on written notification of death; Asteron Life's pays when the claim is accepted. Both are legitimate, and they are not the same product from your family's point of view.
Whether you are the sole policy owner. On the AIA and Asteron wordings the amount changes by $10,000 depending on whether someone else on the policy survives you. Ownership is set at application and is rarely revisited.
Whether your family knows it exists. A benefit paid on notification is only fast if someone notifies the insurer. This is the step most people skip, and it is the one that turns a well-structured policy into a slow one. Write down the insurer, the policy number and the advance amount, and keep that note with your will.
Fidelity Life, whose Bereavement benefit appears in the table above, reports that 93% of all claims it received in the year to 30 June 2025 were accepted and paid, and holds an A- (Excellent) financial strength rating from A.M. Best (Fidelity Life, *Claims we've paid* customer brochure, 1 July 2024 to 30 June 2025, retrieved 18 August 2026). Claims-paid figures are published on different bases by different insurers, so read them as one input rather than a league table. For a comparison of the major insurers, see our best life insurance NZ guide.
What the Advance Does Not Do
The advance covers the funeral. It does not make a life policy the right answer for everyone, and there are three situations where it is not enough on its own.
You cannot pass health underwriting. If you have serious pre-existing conditions or have been declined, a standard life policy is closed to you and a guaranteed-acceptance funeral product may be the only route to insured funeral costs. Our funeral insurance comparison sets out every provider, its stand-down period and its underwriter.
You are past the entry ages. Most New Zealand life insurers close new applications between 65 and 70. Beyond that, New Zealand Seniors accepts to 79 and Chubb Life to 80 on guaranteed-acceptance funeral cover. The verified terms of both, including which one refunds premiums in year one, are in our seniors funeral and life insurance guide.
Your life cover is already committed. If the sum insured is earmarked for a mortgage and family income, some people prefer a separate funeral policy so the funeral does not reduce those funds. That is a judgement about how much total cover you hold rather than about which product is better.
Frequently Asked Questions
Does life insurance automatically include funeral cover?
Most standard life insurance policies in New Zealand include the benefit as a built-in feature at no extra cost, and on the four wordings verified on this page it pays $15,000 to $25,000. Searching your policy document for the word "funeral" may find nothing, because only two of those four insurers use that word in the benefit's name. Search for bereavement, advance, advancement and accelerated as well.
How quickly does the funeral advance get paid?
Faster than the full claim, and on most wordings the trigger is notification rather than assessment. AIA's wording says it will pay the Funeral Benefit "immediately" on written notification acceptable to it that the life assured has died, and that paying it does not indicate acceptance of the claim. Fidelity Life lets you apply for an immediate advance payment. Asteron Life pays once the claim is accepted, which is later. None of the three commits to a fixed number of hours: the real constraint is how fast your family gets the death certificate to the insurer.
What happens if my life insurance claim is declined? Does the advance still pay?
It depends on the wording, and this is where the trigger matters. AIA pays its Funeral Benefit on written notification of death and states explicitly that doing so "does not indicate Our acceptance of the claim", so the money can be released before a decline decision is reached. Asteron Life pays its Funeral advancement when the claim is accepted, so a declined claim means no advance. Either way, the advance is part of your sum insured rather than a separate benefit, which is why accurate and complete disclosure at application matters so much.
Can I have both life insurance and standalone funeral insurance?
Yes. There is no restriction on holding both. Some people keep a standalone funeral policy alongside their life insurance so the funeral costs do not reduce the payout available to their family. Whether that makes sense depends on your total cover amount and your family's needs. If your life cover is already well above what your family requires, the advance alone may be sufficient.
What is the maximum age to get life insurance with a funeral advance?
Most New Zealand life insurers close new applications between 65 and 70, depending on the provider, and some issue reduced cover amounts for older applicants. If you are past that and cannot obtain standard life cover, guaranteed-acceptance funeral products remain open: New Zealand Seniors to 79 and Chubb Life to 80. Our seniors funeral and life insurance guide sets out the verified terms of both.
Do I need an adviser to arrange it?
You do not strictly need one, and some providers sell life insurance direct. A licensed financial adviser can compare multiple providers, check the cover amount, confirm the advance in the wording and help with the application. Adviser fees are typically built into the premium, so the cost to you is generally the same either way. If you are not sure, talk to a QuoteHub adviser who can check the advance in your existing policy or price new cover. Get free advice.
Financial advice is provided by Craig Smith Business Services Limited, trading as Smiths Insurance & KiwiSaver, a licensed Financial Advice Provider (FSP712931). QuoteHub is a trading name. Henry Smith is a Financial Adviser (FSP1010699). The information in this article is general in nature and does not constitute personalised financial advice. Life insurance products and features, including funeral and bereavement advance benefits, vary between providers and change over time. Every benefit figure on this page is taken from the insurer's own policy wording or product document on the date shown, and applies to the specific product named: your own policy may differ. This article publishes no premium figures. We recommend speaking with a licensed financial adviser before making any insurance decisions. QuoteHub may receive commissions from insurers when policies are arranged through our service.
References
- AIA, Personal Cover Life Cover policy wording (PC-LC-10/2023) (retrieved 18 August 2026)
- Fidelity Life, Platinum Plus Life cover wordings and Claims we've paid customer brochure, 1 July 2024 to 30 June 2025 (both retrieved 18 August 2026)
- Asteron Life, Life Insurance product page and life cover brochure (retrieved 18 August 2026)
- Chubb Life NZ, Assurance Extra Life and Life Income Cover (captured 14 August 2026)
- Financial Markets Authority, insurance guidance and the Insurance & Financial Services Ombudsman
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